4. Exchange Rate

There is no official Bitcoin price. Use BitcoinAverage or CoinDesk to see the average price of Bitcoin across all major international Bitcoin exchanges and compare that to the price on your chosen exchange.

Coin ATM Radar's map of New York Bitcoin ATMs. There are 900+ ATMs in 50+ countries.

What are Bitcoin ATMs good for?

Can be more private since in most cases no personal information is required

If you have an ATM in your area it can be a convenient and fast way to buy coins

What are Bitcoin ATMs bad for?

Privacy comes at a cost; Bitcoin ATMs often have a 5-15% premium above market rate

PayPal

There is no way to directly buy bitcoins with PayPal. Under PayPal’s terms and conditions merchants are not allowed to sell bitcoins for PayPal.

I really recommend not buying bitcoins with PayPal. The fees are really high. Chances are that your PayPal is connected to your credit card or bank account, which can be used to buy at much lower fees.

Should I Buy Physical Bitcoins?

We recommend that you stay away from physical bitcoins unless you’re a numismatist.

While physical coins sound like a good idea, they force you to trust the honesty of the creator of the coin. The creator could create two copies of the private key.

Unless you immediately open and withdraw the digital bitcoins from your physical bitcoin, the creator could at any time steal the funds it contains.

Can I Buy Partial Bitcoins?

Yes, of course!

Each bitcoin is divisible to the 8th decimal place, meaning each bitcoin can be split into 100,000,000 pieces. Each unit of bitcoin, or 0.00000001 bitcoin, is called a satoshi.

Most exchanges let you buy as little as $5 worth of bitcoins at a time.

Why Should I Buy Bitcoin Instead of Mining?

A long time ago anyone could mine bitcoins on their computer at home. Today, only specialized computer hardware is powerful enough to do this.

Think about it like this:

Should you buy gold or mine gold? Well, to mine gold you need big powerful machines, a lot of time, and money to buy the machinery. This is why most people just purchase gold online or from a broker.

So Bitcoin is no different.

You should just buy some if you want coins without trying to mine.

Do I need a Bitcoin Account Before Buying?

With Bitcoin, there are not really accounts.

Instead, you should have a Bitcoin wallet. If you want to store bitcoins, then a wallet is where you keep them.

In Bitcoin these wallets are not called an account but a wallet functions almost the same way. The only difference is you are responsible for the security if your wallet rather than placing the security in the hands of a bank or trust.

How do I check if I received a Bitcoin payment?

Why Would Someone Even Want to Buy Bitcoins?

Many people like to purchase some and put them to the side in the hopes that they will be worth more in the future.

Many people are using bitcoins to remit money to their families from out of the country. Right now, Bitcoin is one of the cheapest ways to do this.

People also use Bitcoin to buy stuff online. Big companies like Microsoft, Dell, Newegg and Overstock all accept bitcoins.

Bitcoin is also very unique compared to other markets in that it trades 24 hours a day and never stops. Most stock markets only open on weekdays from 9 AM to 5 PM. So many traders buy and sell bitcoins because it is a fun and fast market to trade.

Can I Buy Bitcoin Stock?

Bitcoin itself is not a stock despite it functioning somewhat like one. You can’t buy bitcoins through a traditional stock fund and instead have to buy bitcoins yourself. This may change in the future if a Bitcoin ETF ever gets approved.

What Happens When you Purchase Bitcoins?

Bitcoins are actually just secret digital codes. When you buy bitcoins, the seller is using a wallet to transfer the ownership of the coins to you. Once your purchase is complete, the codes are now owned by you and not the seller.

Why Are the Chinese Buying So Much BTC?

It seems the Chinese really like Bitcoin’s properties such as its sound monetary policy and that it can be used anywhere in the world. Bitcoin's volatility also makes it interesting for speculative traders.

Is Bitcoin Legal?

Bitcoin is legal in nearly every country. Only a few countries have actually banned the use of bitcoins. Before you buy, make sure you double-check the legal status of Bitcoin in your country.

Why do I need to buy bitcoins before buying most altcoins?

Bitcoin functions as the "reserve" currency of cryptocurrency. So it is very hard to buy other coins without first buying bitcoins. Once you purchase the bitcoins you can convert the bitcoins into other cryptocoins. This is mostly because Bitcoin has very good liquidity and is traded on every cryptocurrency exchange. So most coins are traded against Bitcoin rather than the US dollar or other fiat currencies.

Am I Anonymous when I Buy?

Bitcoin is not anonymous but rather pseudonymous. All Bitcoin transactions are public but it is not always known the real identity behind any give Bitcoin address.

Can I use Multiple Exchanges?

If the limits on one exchange are to low you can simply open an account with another exchange to give yourself the ability to buy more.

You can signup, join, and use as many Bitcoin exchanges as you want that are available in your country.

Do I need to Pay Taxes on Bitcoin?

In most countries you will need to pay some kind of tax if you buy bitcoins, sell them, and make a gain. In the US you must do this on every transaction.

Be sure to check with your country’s tax authorities to make sure you are paying all the required taxes on your bitcoin use.

What Other Ways can I Get Bitcoins Besides Buying?

Just like any other form of money, you can get bitcoins by requesting from your employer to be paid in bitcoins.

Chapter 5

Avoiding Bitcoin Scams: Don't Lose Money!

I've been using Bitcoin for 3+ years. I've never fallen victim to a single scam. Follow the tips explained here and you'll greatly reduce your chances of losing money.

Check Ratings

If you’re using a peer-to-peer exchange like LocalBitcoins or Wall of Coins, check the seller’s feedback. If most of their feedback is positive, your trade is more likely to go through without issues. If a seller has lots of negative feedback, it’s best to simply stay away and find a more reliable seller.

Use Escrow

Many scammers will try an approach like this:

“Send me bitcoins, and once I get the bitcoins I’ll pay you on PayPal!”

Don’t ever agree to a trade like this. Bitcoin payments are irreversible, so if you send first the scammer can simply not pay you and keep their bitcoins.

PayPal can't force the scammer to pay either, due to the pseudonymous nature of Bitcoin which doesn’t record the identity of a payment’s sender or recipient. This would leave you with no way to get your bitcoins back.

Stay Away from Bitcoin investments

Any service that claims to pay interest on bitcoins or increase your bitcoins is likely extremely risky or an outright scam. If it sounds too good to be true, stay away.

Be Careful with Altcoins

What are altcoins? Altcoins are cryptocurrencies other than Bitcoin.

Altcoins are traded globally on hundreds of exchanges. Avoid throwing money into coins which are experiencing a sudden and dramatic spike in price and volume. Such moves, especially in insignificant coins with otherwise thin volume and flat price action, are likely to crash fast.

Chapter 6

Secure your Coins

Don't store coins on exchanges! Bitcoin users have lost over $1 billion worth of bitcoins in exchange hacks and scams.

Get yourself a Bitcoin wallet and control your own coins. For large amounts of bitcoins, we recommend hardware wallets. Hardware wallets are small, offline devices that store your bitcoins offline and out of reach from hackers and malware.

Why? It's pretty simple:

Hardware wallets are the easiest way to securely store bitcoins and easy to backup